MANILA -The recent statement of a US trade official thumbing down the prospect of a free-trade agreement (FTA) between Washington and Manila has dampened the optimism of a major group of local exporters, losing what would have been a significant boon to their business.
“The statement of the US government not being keen on the granting of the FTA and GSP renewal is dampening the group’s optimism,” Foreign Buyers Association of the Philippines (Fobap) Robert Young said in an email sent to the Inquirer.
To recall, US Trade Representative Ambassador Katherine Tai had told local press earlier this week that the United States is currently not considering traditional FTAs as the “appropriate” framework to address trade challenges and opportunities of today.
PH is looking at other ways to expand US trade
The United States remains their largest export market, according to Young. His trade group is made up of buyers and sellers of clothing and other hard goods, such as furniture, handicrafts and crafts.
According to Young, the Philippine textile and garment industry exports amount to about $1.5 billion annually, and the United States is the largest export market.
It is estimated that the sector will expand by only 10 percent in this year. Some garment factories from China have relocated to other Asian countries including the Philippines.
Local exporters will be denied the opportunity to enjoy tariff reductions, as well as wider access to markets, which are commonplace in bilateral trade agreements.
“However, regarding the GSP, we are still hoping that with the priority assistance and moral suasion of our Philippine government trade officials, it will be renewed by US Congress in due time,” Young said further.
Fobap officials said even American companies are looking forward its renewal. They cited a Washington based East West Center report that US businesses importing goods from the Philippines have paid extra tariffs of $120 millions under the GSP Framework that expires in December 2020.
In 2020, the Department of Trade and Industry reported that the Philippines exported to Western countries under the GSP Framework totalled $1.6 Billion. This places the Southeast Asian Country fifth out of the GSP Users, behind Thailand, Indonesia Brazil and Cambodia.
The Philippines’ major GSP products include tires, bags, insulated electric conductors, sugar, non-alcoholic beverages and hair dryers, among others.
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